February 1, 2022
What Are The Stages Of a Sales Pipeline?
- There are seven essential stages in a sales pipeline, and if you follow each step, you’ll be amazed at the outcome.
- The first step of building your pipeline is deciding on an objective for each stage of the process.
- By planning ahead, you can make the most of each stage and increase your chances of closing more sales.
A sales pipeline is a process that helps you visualize different stages of the sales journey. Separate from a sales funnel, this model walks through the buyer’s journey from lead to customer. It also shows where in this journey are the best opportunities to generate revenue.
A good sales pipeline will help you close more deals by giving clear direction on what to do next when working with prospects. The first step of building your pipeline is deciding on an objective for each stage of the process.
The Essential Stages in a Sales Pipeline
There are seven essential stages in a sales pipeline, and if you follow each step, you’ll be amazed at the outcome. Proper sales pipeline management allows sales reps to anticipate what prospects need and effectively estimate when a deal will close.
You’ll want to define what your objective is for each stage of the process so that you can measure success.
1. Lead generation
In this stage, you’re actively seeking new leads. The goal is to identify potential customers for your product or service. This is typically accomplished through ads and marketing campaigns.
The three most popular ways to attract potential leads are through email marketing, events, and engaging web content.
Lead generation is a long-term, ongoing one-to-many approach, focused on your target market. In this marketing stage of the sales pipeline, you are building awareness and interest. Essentially, lead generation and lead nurturing campaigns warm up prospects.
Once you have a list of potential leads, the next step in the sales pipeline is to determine who is most likely to buy from you. This stage is called prospecting and unlike lead generation, it’s a 1-on-1 approach.
This is the stage where you identify the leads that are most likely to convert and that match your ideal customer profile.The goal of this stage is to focus on a smaller, defined set of prospects in your target market.
This is the time in the sales process to make cold calls, search LinkedIn, send emails, all with the aim of setting up first-time meetings. It can take an average of 9 attempts after initial contact before you get a response from a potential lead.
This is a lot of work and having persistence and a plan pays off. Once your meeting is set, know your value proposition and deliver it with confidence. Be prepared to engage with questioning prospects and anticipate their objections.
By now you’ve compiled a long list of customers who are ready to buy, right? Maybe not. Unfortunately, research shows that the majority of lost sales are due to improver qualifying. The prospects simply weren’t a good match. To avoid wasting time and effort, you’ll need to qualify them ahead of time before moving them forward in the sales journey.
Once you qualify them, they become qualified leads. The goal is to get them into the stage of the journey to becoming sales-qualified leads (SQLs).
Here are a few things to keep in mind:
- Make sure that prospects are a good fit for your business.
- Can they afford your product or service?
- Will they use your product or service?
This is the time to collect as much detailed information as possible to match prospects to your customer profiles. If you’re not sure how to do this, think about what information your customers typically provide when they sign up for a product or service. It’s all about asking the right questions.
For example, if you sell marketing automation software and prospects are filling out forms with their contact details, company name, and website URL on the landing page of your website then that’s great customer profile data.
Don’t forget to determine what else may be competing for your prospects’ attention. This means finding out additional information such as what other options may be on the table, what other vendors they work with, and what they do or do not like about the other solutions available to them.
Once you’ve built trust with someone who’s interested enough to spend time talking with you about their needs, you’re ready to move on to the next stage of the sales pipeline.
4. Ways to Connect
At this stage of the sales pipeline, your most highly qualified prospects have responded to your outreach and you’ll be able to establish a dialogue with them about their needs. This is where it’s critical that you ask great questions and build on what they tell you so that you can push the conversation forward.
Make sure to ask them how they want to connect and engage with you. Think about way they would respond best. Would a product demo be most appropriate, a zoom meeting, or a conference call?
After you’ve gathered all of the information you need, it’s time to put together a proposal that outlines your solution and how it meets their needs. This is often where sales can fall apart if the proposal isn’t relevant to what the prospect told you during the qualification process.
If you nail this part of the sales pipeline, you’ll clinch the deal.
The most successful proposals typically include information such as:
- A recap of your prospects’ main pain points
- The unique solution you offer (with specifics)
- Clear pricing information
- An outline for implementation
- Exact terms and conditions
- Any guarantees you can offer
6. Negotiation and close
This is an important stage of the pipeline, and it’s where you work to get the best deal for your company while still meeting the prospect’s needs. This is also the stage where conversion rate really matters. It can be a long process, but it’s worth it when both parties come away happy.
Too many sales reps believe that the close is the last step of the sales pipeline, but in reality, it all comes back to retention. Once you’ve got the client, it’s important to keep them happy and coming back for more.
Why does the stage of this sales process deserve so much effort and attention? Because research shows that if you can increase your retention rates by just 5%, you can bump up your profits by up to 95%.
Steps to Implement
Step 1: Define your process
By defining the process for your sales team, you’ll save time and have a better understanding of identifying leads into customers.
Successful lead generation follows these best practices:
- Generate clear customer profiles: Analyze previously closed deals that have been mutually beneficial: what common factors do these deals share? By developing specific customer profiles, your team can get ahead on lead generation.
- Use targeted content: Once you have your customer profiles in place, create relevant and targeted content that will help to attract these prospects. Collaboration is key. Try scheduling brainstorming sessions with both the marketing team and sales team. You’ll be surprised how much insight your sales team can provide to make content more engaging for potential customers.
- Build a brand: Your company’s reputation can affect your lead generation. Make sure that you are presenting the right message to the right audience with social media campaigns, speaking engagements, and networking events.
- Always ask for referrals: obtaining referrals can lead to some of the most highly qualified leads! Don’t skip this step!
Step 2: Understand your qualification methods
Qualified leads need to be vetted based on a set of clear criteria that’s unique to the needs of your company. This can be done through surveys, qualifying questions, or a lead scoring system.
When in doubt, use the BANT method. BANT stands for Budget, Authority, Need, and Timeframe.
The most important part of this step is ensuring that your sales team can communicate clearly with the prospect to understand their needs. If you skip any of these steps in your process, you may be missing out on potential revenue.
Step 3: The best way to connect and engage
Before you pitch your product or service, make sure everyone has a clear understanding of the goal or purpose of the meeting: Start by making sure you have a list of all stakeholders involved. Kick off the meeting by stating the goal explicitly. If you have a large team, it might be helpful to write the goal on a whiteboard so everyone can see it.
Here are a few things to consider:
- Set your agenda ahead of time, and keep things moving: Don’t let an off-task conversation derail your meeting from your core objectives. While tracking your meetings is important, be attentive and save some time for answering questions.
- Have your resources ready: What will it take to close the deal? Hard data, webinar info, or case studies? Consider all the resources you may need to provide to support the most powerful statements in your sales pitch and organize them ahead of time.
- End with clear next steps, and follow up promptly: Make absolutely certain that everyone leaves the meeting with a concrete plan in place. A friendly next-day follow-up email is an appropriate way to review the highlights of the meeting and reiterate the agreed-upon next steps.
- After the meeting, debrief with your representatives: Take a few minutes to recap what happened in the meeting and assign tasks or next steps. This will help you hold everyone accountable and make sure nothing falls through the cracks.
Step 4: Identify stages
Within the sales pipeline, there will be certain stages and processes that are truly unique to your business. Take some time to understand the steps that your prospects go through before becoming customers.
Reflect on the ins and outs of your industry and the dynamics of your business relationships. Then, determine what milestones are necessary to bring your prospects closer to a purchase.
Identify core stages that are unique to your business and outline what success looks like in each stage.
Step 5: Work out steps for post-sale follow-ups
Just because you closed a sale doesn’t mean your job is over. Make sure the experience continues to be a good one for your new customers.
Keep these pointers in mind:
- Help new buyers onboard successfully: Make sure your customer is getting the best use out of your product with an effective onboarding process. This can be achieved in different ways, such as custom training materials, how-to docs, or just being available to answer their questions as they pop up.
- Dedicate time to checking in: After you close a deal, set a reminder to see how things are going in the sales funnel. For example, follow up with the customer in a month or so and see how things are going. This important action demonstrates your care and concern for your new customers and keeps them engaged with your product.
- Solicit feedback: Never underestimate the value of new customer feedback. Simply being asked makes new customers feel appreciated, but it also provides your sales leaders with incredible insights on how to improve your product and sales process.
As you continue to refine your own sales process, consider these specific steps to help you maximize your sales opportunities:
- Focused on B2B sales? Develop a strong email drip campaign for lead nurturing
- Keep an opportunity record of all prospective buyers
- Track the length of your sales cycle and keep historical data on closed deals
- Analyze which specific sequence of actions yields quicker closed deals
- A good sales pipeline follows a simple process that the entire sales department can get behind
By knowing what to expect and by planning ahead, you can make the most of each stage and increase your chances of closing more sales. The various sales pipeline stages provide opportunities to reach your target audience and grow your customer base.